VW in advanced talks on listing Porsche brand

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Volkswagen is exploring the possibility of floating its highly profitable Porsche brand, the automaker has confirmed, in a much-anticipated move that could result in one of the biggest public offerings in Germany for several years.

In a statement released on Tuesday morning, the world’s second-largest automaker said it was in “advanced discussions” with its majority shareholder, family-owned Porsche SE, regarding a possible IPO of the Porsche brand.

“To this end, Volkswagen AG and Porsche Automobil Holding SE have negotiated a framework agreement which should form the basis for further steps in the preparation of a possible IPO,” the company said.

But he stressed that a final decision had not yet been made and would be subject to the approval of the Volkswagen Group’s management and supervisory boards. A meeting of VW’s supervisory board is due to take place next month.

Volkswagen shares jumped 9% to €190.14 mid-morning in Frankfurt after the announcement. Shares of Porsche SE, which is also listed although the vast majority of shares are owned by the family, rose 9% to €88.88.

Some analysts have estimated that using multiples applied to peers such as Ferrari, Porsche would be valued by the market at up to €200 billion, far exceeding VW’s current market capitalization of around €110. Billions of Euro’s. However, others said they expected Porsche to be valued at more than 100 billion euros, despite its healthy profit margins.

Regardless of the precise valuation, a partial IPO was described by a VW source as a “win-win.”

Porsche was first integrated into Volkswagen in 2012, in a reverse takeover after the famous sports brand failed to buy the Wolfsburg-based company.

Along with Audi, the brand has since been one of the Volkswagen Group’s main profit drivers and has made further inroads into the electric market with its successful Taycan model, which now outsells the 911.

Pressure is mounting for VW to free up some of Porsche’s value to fund its own electrification efforts.

Volkswagen has already pledged to spend 52 billion euros on emission-free models, but executives told the Financial Times the company would need additional funding for battery factories and needed to secure the necessary materials.

Porsche SE, the Porsche-Piech families’ investment vehicle which owns 53.3% of VW shares with voting rights, has also confirmed that it may buy ordinary shares of Porsche AG in a possible IPO. stock Exchange.

The statement follows speculation that Porsche SE would sell part of its stake in Volkswagen to fund such an acquisition. Such a move would loosen the grip that Porsche SE and the state of Lower Saxony – VW’s second largest shareholder – have on company decisions.

The office of Lower Saxony Prime Minister Stephan Weil, who also sits on VW’s supervisory board, declined to comment on the IPO plans.

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